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- Somehow Business Week got their hands on Digg’s financials and reports that the company had 2007 revenues of $4.8 million and losses of $2.8 million. In its first three quarters of 2008, Digg had revenues of $6.4 million and losses of $4 million. Trend those specs and you’ve got 2008 revenue of $8.5 million, with $5.3 million in losses.
- Many had thought due to a search deal with Microsoft, that Digg was producing around $100 million a year in revenue. Considering they are looking to have 150 employees by the end of the year, you’d think that a majority of those jobs are going towards ad sales or other jobs that bring in the bread. But they aren’t, Digg doesn’t produce any of their own content and they don’t take on their own ad sales. So what does everyone do up there besides manage the community and work on Digg tools?
- Well apparently 80% of the employees are engineers and are working on a stealth advertising system that would let the community vote ads up or down, lowering their cost per click the higher they get in the system (not confirmed). Certainly sounds experimental, not to mention a huge risk of burning through capital for nothing. If Digg weren’t employing as many people (they could operate the company with 15 people or less), they could be fairly profitable.
- But this makes one wonder about the guys running the ship. Its widely known that founders Kevin Rose and Jay Adelson cashed in stock during the last round of capital they raised for Digg. Also, Kevin sold Pownce to SixApart recently, giving him another nice pay day. Does this mean that the guys are content with continuing to tweak Digg and burn through money attempting to make it the money machine that it will never be? The two have already turned down an offer for $100 million for the business, which they scoffed at. With revenues like they are putting up, shouldn’t they be the ones getting scoffed?TC
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